In a week filled with pivotal events, Wall Street opens with a cautious note as investors prepared for a barrage of crucial developments, ranging from big tech earnings to a Federal Reserve rate decision and the release of January’s jobs report.
The Dow Jones Industrial Average (^DJI) and the S&P 500 (^GSPC) remained relatively unchanged, hovering around the flatline, following their positive performance in the previous week. The Nasdaq 100 (^NDX), weighted heavily with tech stocks, inched slightly higher on Monday morning.
The spotlight of the week is firmly on the technology sector, with five of the “Magnificent Seven” tech giants gearing up to release their earnings reports. The market will closely scrutinize Microsoft (MSFT) and Alphabet (GOOGL, GOOG), which are set to lead the pack on Tuesday, along with Apple (AAPL) and Meta (META) among the plethora of corporations scheduled to report.
Amazon (AMZN) made headlines as its shares gained 0.4%, despite terminating an agreement to acquire iRobot (IRBT), the maker of Roomba vacuums. The companies cited regulatory approval challenges as the reason for calling off the deal. In contrast, iRobot’s shares plummeted over 16%, and the company announced a significant workforce reduction of 31%, with CEO Colin Angle stepping down immediately.
Tesla (TSLA) experienced a positive start to the week, with shares opening higher on Monday, recovering from a recent sell-off triggered by the electric vehicle giant’s downbeat production outlook for 2024.
Investors are also on edge awaiting the Federal Reserve’s policy decision on Wednesday. Recent data showing cooling inflation and a robust economy are expected to lead to a steady interest rate at 5.25%. The market will closely analyze Chair Jerome Powell’s comments for hints on potential rate cuts amid a scaling-back on March rate cut expectations.
Adding to the mix is the eagerly anticipated US jobs report for December, scheduled for release on Friday. Analysts and investors will use this data to gauge whether the Fed has achieved a “soft landing” for the economy.
Amidst these domestic concerns, apprehensions about China’s economic health intensified due to the impending failure of Evergrande (3333.HK) (EGRNQ), a property development giant. A Hong Kong court’s order for the company’s liquidation is seen as a pivotal moment in the property crisis affecting the world’s second-largest economy.
Oil prices remained under pressure as worries about potential impacts on Chinese demand clashed with supply risks stemming from increased tensions in the Middle East following a drone attack on US forces. US benchmark WTI futures (CL=F) traded below $78 a barrel, while global benchmark Brent futures (BZ=F) were around $83 a barrel.
As Wall Street strikes a cautious note amidst a week filled with pivotal events, investors remain vigilant, navigating through the intricate web of big tech earnings, a Federal Reserve rate decision, and the unveiling of January’s jobs report.
Source: Yahoo Finance
